Macy’s launches in-store pop-up concept for brands

Discussion
Photos: Rebecca Fitts, Instagram @thewildwestofretail
Feb 07, 2018
George Anderson

Macy’s has launched a new pop-up concept that allows brands and other companies to sell their products and services on the ground floor of the retailer’s stores.

The Market @ Macy’s is being pitched as a turnkey operational solution enabling companies to gain additional exposure to the department store’s customers without a long-term commitment. Those filling pop-up locations pay a fee to Macy’s for the space while keeping all the sales revenue. Space is rented with a one-month minimum requirement and rates are based on location.

Macy’s sales associates working at the Market will be dedicated to assist the pop-ups, a valuable service for companies with little or no experience working in a retail space. The package also includes marketing support by Macy’s via email and social media. A variety of fixtures are available to pop-up merchants through the store.

The initial launch of the concept will include pop-up space in Macy’s stores located in Boston, Detroit, Fort Lauderdale, New York, Las Vegas, Los Angeles, Pittsburgh, San Antonio, San Francisco and Seattle. Macy’s will decide after six months if it will expand the program to other locations.

Photos: Rebecca Fitts, Instagram @thewildwestofretail

“What we think makes this so attractive for Macy’s and our customers is it continues to drive customers to stores by giving a constant break of discovery,” Marc Mastronardi, EVP of new business development and innovation at Macy’s, told CNBC.

DISCUSSION QUESTIONS: Do you see The Market @ Macy’s as strictly a rental revenue grab for Macy’s or will it help store business, as well? Ultimately, will the concept prove successful for Macy’s and the companies that open pop-up shops inside its stores?

Braintrust
"Potentially [the pop-up brand being the seller of record] makes it easier for Macy’s to bring in more interesting, emerging products."
"I don’t love, “Macy’s sales associates working at the Market will be dedicated to assist the pop-ups.” They don’t know about their own merchandise..."
"For once in a long while, I believe Macy’s could even be in a position to attract new shoppers!"

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25 Comments on "Macy’s launches in-store pop-up concept for brands"


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Dave Bruno
BrainTrust

I love this idea. Keeping stores relevant with shoppers is perhaps retail’s greatest challenge. The “treasure hunt” mentality is a proven way to keep people coming into the store (e.g. ROSS Stores, TJ Maxx,etc.) and the notion of a constantly changing lineup of stores is a great way to keep the mystery alive. The power of combined marketing from both Macy’s and the market brands can only help drive traffic, too.

Lee Kent
BrainTrust

I too think this concept is a good one for Macy’s. As long as they keep the pop-ups relevant to their brand, it is a great way to draw repeat customers and create exciting experiences. For my 2 cents.

Neil Saunders
BrainTrust

This is a sensible idea as it allows Macy’s both to make good use of excess space and to create a regularly changing point of difference in its stores. That said, I doubt this will be sufficient to drive sales or traffic on its own. Macy’s needs to fix its core proposition to do that.

Jason Goldberg
BrainTrust
It’s a reasonable concept for Macy’s to try, but not a game changer. The model of branded shop-in-shops is basically the standard merchandising approach for department stores in Europe, and branded pop-ups are certainly not new to Macy’s. What’s unique here is that the brand is the seller of record rather than Macy’s. Potentially that makes it easier for Macy’s to bring in more interesting, emerging products which could be beneficial to Macy’s traffic. B8TA is a retail marketplace concept with several stores in the U.S. They host shop-in-shops in a number of Lowe’s stores which are essentially the exact same concept we are talking about here. Those pop-ups put a lot of interesting, new products to surprise and delight shoppers in Lowe’s stores, and there is no reason to believe the Macy’s version couldn’t see similar success. The real question is, what level of support/effort is Macy’s prepared to offer? How will Macy’s curate the sellers? How much merchandising flexibility will each marketplace seller have? Will the brands have an opportunity to be promoted… Read more »
Vahe Katros
Guest

Great post and to riff on your B8TA reference, B8TA provided a bricks and mortar venue for stuff found in places like Product Hunt. Like Product Hunt, Macy’s merchants and their extended network are aware of innovative products — but sadly, they usually don’t make financial sense to sell in stores.

So perhaps Macy’s pop-ups need to be at the category-level and the model might be to sell slots to products within the category. Macy’s would provide the tech infrastructure to help the product companies project themselves into the store (and provide data back to the brands to help them succeed). Like B8TA, the brand keeps the money so show-rooming is not an issue.

Jeff Hall
BrainTrust

Provided The Market @ Macy’s offers access to unique or emerging brands consumers covet, it should drive foot traffic from new and existing customers. I see this concept akin to the success Nordstrom realized with the Bonobos and Tesla pop-up shops. In the long run, the pop-up brands will likely see the most benefit from the arrangement with Macy’s.

Brandon Rael
BrainTrust

This is an outstanding idea and will ultimately be a win-win for Macy’s, as well as the emerging brands leveraging the prime pop-up spaces on the main selling floor. Macy’s has continually sought ways to remain relevant, and a rotating pop-up retail model is exactly what the department store icon needs to keep things fresh and new.

Pop-ups give brands, designers and artists a physical retail platform without the significant overhead of long-term retail leases and other operating costs. For the consumer, particularly those focused on new experiences, products, etc., this offers a compelling reason to return to Macy’s.

We will need to see how things develop from here, as this will certainly drive more traffic to the store, increase revenues in the main store and enhance the brand’s relevancy.

Bob Amster
BrainTrust

A well-curated assortment of pop-ups can only help to raise interest and customer excitement. Not unlike The Edit @ Roosevelt Field, the concept is different and has the potential of bringing much-needed excitement to the department store segment.

Sky Rota
BrainTrust
2 months 14 days ago

I think this is a great idea. Although I’m still worried about the “fee.” What kinda fee are we talking about? That could play a huge role in who will be able to use the pop-up space. I believe getting anyone to come into your store gives you a chance for a purchase. I don’t love, “Macy’s sales associates working at the Market will be dedicated to assist the pop-ups.” They sadly don’t know about their own merchandise; I wouldn’t want them trying to sell mine. I would have my own people in there, that would have to be an option. I do like, “marketing support by Macy’s via email and social media.” You can never have too much marketing exposure.

Lyle Bunn (Ph.D. Hon)
BrainTrust

When consumers expect to see product collections and curating by product type, changing the experience to a bizarre of brand pop-ups make for for interesting initial visits, but could become an annoyance quickly. Let’s face it, retailers can easily and quickly become real estate subcontractors, but does this add to the customer experience or reinforce their role in the supply chain? I think not. The benefit that retailers offers is in their offer of product options for examination and purchase. Imposing effort on consumers in the name of discovery and homage to brands weakens the knees of the retailer proposition.

Phil Chang
BrainTrust
Phil Chang
Retail Influencer, Speaker and Consultant
2 months 14 days ago

I think pop-ups will help with revenue and curation of products. In the new age of retail, right-sizing space is key — we’ve talked about Kohl’s doing this in a previous RetailWire discussion, so finding brands to entertain and delight customers is the next step.

Curation is key here — they’re going to need to pick the right brands to draw traffic and keep it fresh so customers will come to see what’s new and what they could potentially buy. This is could be a pivotal moment for Macy’s — gain the trust of consumers and they’ll be able to translate these learnings into changing the rest of their business.

Ed Dunn
Guest
2 months 14 days ago

I noticed Chicago was not on the list — the only store in the U.S. where this concept would actually work is at the Marshall Field’s store on State Street. The Chicago Macy’s store has a subway-connected basement level and more square footage underutilized — that the planners missed Chicago is incredible.

Camille P. Schuster, PhD.
BrainTrust

The questions are whether Macy’s has enough customer traffic to make it worthwhile for the fee that has to be paid and whether this idea will increase Macy’s traffic.

Scott Norris
Guest

I’d also wonder why the Mall of America wasn’t included — except that the mall itself did it with RAAS Local Market just outside the entrance to Nordstrom (in the space Willams-Sonoma abandoned). About a dozen local brands from apparel to food to gifts each took about 100 square feet each. The food vendors are even using the kitchen area that was left behind. Great concept for holiday shopping and ideally placed to appeal to Super Bowl visitors!

Harley Feldman
BrainTrust

The pop-up store should be a win-win for Macy’s and the brands. Macy’s gets new products to offer its customers keeping the stores fresher, and they get outside revenue for renting the space. The brands get exposure to a large customer base face-to-face without making a permanent investment in a retail space where they do not know if they will be successful. Pop-ups and other store-within-a-store concepts will be more and more successful over time. It allows retailers with pop-ups to broaden their customer base into the stores, possibly have unique product offerings and provide excitement to customers looking for new experiences when they enter a retail store.

Peter Luff
BrainTrust

It’s a sensible approach in terms of exploiting excess space. The hypothesis that it will create a fresh lineup which will keep pulling in the customers needs proving, however. Build in a people counting system into the pop-up store to prove they are pulling in the visitors, then measure where else they go and what level of cross selling occurs. This will also help Macy’s decide what lines they want to bring into the main store to truly keep their line up fresh. Without these facts it will likely fade as an initiative for the next idea in the hopper.

Dan Raftery
BrainTrust

This is great. Combines several forces that should attract shoppers to stores. Kind of like a physical “The Grommet.” Two keys to success that I see, beyond the obvious financials: First, the products must be unique, cool and not expensive (but not cheap/discounty stuff, which would kill this concept) and the in-store service and execution must be special too.

Anne Howe
BrainTrust

As long as Macy’s keeps the fees in line, this should be a big hit with shoppers. I hope Macy’s will provide best-in-class associate assistance as well as putting some social and digital marketing support behind every pop-up to capture and retail shopper interest.

For once in a long while, I believe Macy’s could even be in a position to attract new shoppers! Please, Macy’s … focus on keeping these spaces well-merchandised and not messy!

Terry Lugo
Guest

I think this is a great idea, and I applaud Macy’s for doing it. I don’t think it’s just a way to get rental revenue, I think the purpose is to keep things fresh and fun for customers. It’s a wonderful way for the Macy’s brand to provide support to smaller brands that can’t afford to do full shops for fixtures/marketing and staff. They do need to get the word out on this, to be sure consumers are aware of it and do other social events around the introduction of the new market brands as they are introduced. Like a kickoff party and marketing the heck out of it on Instagram, too. Hope this works out for Macy’s and the brands involved!

Ricardo Belmar
BrainTrust
Having seen some of Macy’s recent efforts in pop-ups and store-in-a-store at their flagship Herald Square store, I think they are on to something great here. Foot traffic at the Samsung shop and the B8ta shop at Herald Square was tremendous when I visited last month. If Macy’s chooses the products wisely in the Market section this should make a noticeable improvement in traffic for the store. The question is will these shoppers buy something else while they are at Macy’s. The debate over this point is interesting to me since it’s the same as when Kohl’s announced their Amazon mini-stores in some Kohl’s stores for the exact same purpose. I believe pop-ups are quickly becoming the future of retail and may be one of the saviors for department stores by delivering on the “treasure hunt” thrill shoppers seek out. Assuming the fee is reasonable, and presumably helps Macy’s cover costs of associate help and marketing assistance — plus some reasonable profit amount for Macy’s since they aren’t taking a portion of the product sales… Read more »
Craig Sundstrom
Guest

While I think this idea might have promise, I’m confused as to how it works. Will it be the same shops in the ten stores or is each separate? And if the latter, how would the concept be expanded — i.e. which one(s) of the ten?

It also illustrates the problem of promotion in a company with a vast number of stores, as opposed to the old local model of flagship + branches. Of course there’s no going back to that model (of a half-century ago), and whatever the results, the cliché is true — “at least they’re trying something.”

Min-Jee Hwang
BrainTrust

This is a great move for Macy’s. It will provide more foot traffic, rental revenue, and access to new products. This last point is my favorite. If Macy’s notices a pop-up doing well, it would be a smart move to iron out an agreement for a long term presence there or to even cary some of that retailer’s items in more Macy’s stores. It’s a win-win for Macy’s and the up and comers.

Anne-Marie Kovacs
Guest

Discovery is the operative word. Much of Macy’s offering has become generic, expected. New indie brands will give customers a reason to visit again. The ephemeral nature of pop ups is a motivating factor to get shoppers in the store “before it’s gone.” It also becomes source of curiosity to anticipate what will be popping up next. With that, it will be interesting to see exactly how Macy’s will be educating the jaded public about their new Market offering. The initiative risks being a little disjointed if, as I understand it, every store could be featuring different brands for different amounts of time?

Astute product curation will be an important factor to maintain the discovery experience. The capabilities of “Macy’s sales associates” as engaging ambassadors will be crucial as well.

I am equally curious about the requirements to be accepted as a The Market @ Macy’s vendor, the monthly fees, types of products, POS, training, etc. Anyone know?

Rebecca Fitts
Guest

It is both a real estate play and a way to attract new brands. Macy’s is looking to develop brands that do well in the pop-up format. The barriers for doing business with department stores for smaller brands are huge and a major deterrent for wanting to do business with them. All the department stores are looking for survival tactics and I think this one has legs.

Mike Osorio
BrainTrust

Macy’s is buying in to a global trend for pop-up retail. Customers love the opportunity for discovery and pop-ups, when executed well, have proved to be traffic builders in their own right. Once Macy’s customers realize that these pop-ups change regularly and they establish the idea of “discovery,” the concept will become a magnet for repeat visitors of the type that Macy’s wants: younger, interactive, and likely to promote through Instagram and other social networks.

I have personally seen this work brilliantly at DFS downtown and airport locations worldwide. The key is to curate interesting and engaging products and brands, ideally local. It is a significant win-win for both the brand and for Macy’s. As noted, the brand gets significant immediate exposure they’d be challenged to get otherwise, and Macy’s gets the cachet of being cool and relevant, particularly for younger consumers that may have given up on Macy’s for anything other than cheap fashion.

wpDiscuz
Braintrust
"Potentially [the pop-up brand being the seller of record] makes it easier for Macy’s to bring in more interesting, emerging products."
"I don’t love, “Macy’s sales associates working at the Market will be dedicated to assist the pop-ups.” They don’t know about their own merchandise..."
"For once in a long while, I believe Macy’s could even be in a position to attract new shoppers!"

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